What is the process by which a mortgagor regains interest in a property?

What is the process by which a mortgagor regains interest in a property?

• A. Foreclosure
• B. Redemption
• C. Refinance
• D. Deed in lieu

Answer: (B)

Redemption is the process by which a mortgagor regains ownership of a property after default. By paying the overdue amount plus any interest, penalties, and costs within the allowed period, the borrower cures the default and restores full ownership. This right may be exercised before the foreclosure sale (often called equity of redemption) or, in some places, after a foreclosure sale during a statutory redemption period by paying the sale price and eligible costs. Once redeemed, the lien is cleared and title returns to the borrower. Foreclosure ends the borrower's rights and transfers title to the lender; refinancing replaces the old loan with a new one; a deed in lieu transfers title to the lender to avoid foreclosure and does not restore the borrower’s ownership.

Redemption is the process by which a mortgagor regains ownership of a property after default. By paying the overdue amount plus any interest, penalties, and costs within the allowed period, the borrower cures the default and restores full ownership. This right may be exercised before the foreclosure sale (often called equity of redemption) or, in some places, after a foreclosure sale during a statutory redemption period by paying the sale price and eligible costs. Once redeemed, the lien is cleared and title returns to the borrower. Foreclosure ends the borrower's rights and transfers title to the lender; refinancing replaces the old loan with a new one; a deed in lieu transfers title to the lender to avoid foreclosure and does not restore the borrower’s ownership.